Legal Updates

SFO shows teeth in Rolls Royce bribery settlement

The High Court has approved a deferred prosecution agreement (DPA) between Rolls Royce (RR) and the Serious Fraud Office (SFO) in relation to widespread allegations of bribery and corruption over a 24 year period. RR has reached separate agreements with prosecution authorities in the US and Brazil. Under the DPA RR must pay £497 million (£671m including the US and Brazil settlements) and submit to a course of conduct, at the end of which the threat of prosecution will be dropped. In approving the settlement, the court noted that a fine at this level was broadly equivalent to the likely sentence following a guilty plea in a prosecution.

The DPA is the result of a four-year investigation by the SFO at a cost of £30m, involving 70 investigators and the examination of 30m documents. RR admitted various counts of conspiracy to corrupt and failing to prevent bribery and apologised unreservedly for this. The investigation covered wrongdoing over the period 1989 - 2013 in 12 countries, including paying by RR of very substantial bribes, falsifying documents and interfering in investigations. Ultimately when confronted by the SFO in 2012, Rolls Royce cooperated with the SFO’s investigation and handed over its internal inquiry.

This is only the third example of a DPA since they were introduced in 2014 and by far the highest value settlement. The success of its investigation may encourage the SFO to move onto new targets and is a timely reminder of the range of conduct that is prohibited by the Bribery Act 2010:

Bribing another person

­Receiving a bribe

Bribery of foreign officials

Failure by a commercial organisation to take adequate steps to prevent bribery

These provisions are widely drafted and have international reach. Offences can be punished by an unlimited fine, which as shown in the RR case can be very substantial. The Bribery Act also allows for terms of imprisonment of up to 10 years. Notably the RR DPA leaves open the possibility of charges against individual executives and even requires RR to cooperate with potential prosecutions.

Clarkslegal, specialist Director’s Duties lawyers in London, Reading and throughout the Thames Valley.

For further information about this or any other Director’s Duties matter please contact Clarkslegal's Director’s Duties team by email at contact@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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